Oilfields’ privatisation aimed at raising domestic output: DGH

NEW DELHI: The chief of the Directorate General of Hydrocarbons has said the government is following a transparent method to pick state firms’ oilfields for privatisation with a single aim of raising local output, rebutting ONGC executives’ charge that the government is not being fair in proposing to take away its fields.
“The entire effort is to raise production from the mature and declining fields of ONGC and Oil India,” Atanu Chakraborty, director general of DGH, told ET.

“The government will follow transparent and objective criteria to pick fields. The extent of reserve, extraction and rate of recovery will be the key criteria,” he said.

DGH is the technical arm of the oil ministry and is leading the government’s efforts in preparing a policy that would give private firms control over some of the key producing fields of ONGC and Oil India. The government has drawn a list of 11 fields of ONGC and four of Oil India, in which 60% participating interest would be auctioned to private players.

The plan has met with resistance from ONGC. “The government was trying to justify everything in the name of raising oil production,” said an ONGC executive, who did not wish to be identified.

The company’s chairman has written to the oil secretary, arguing against taking away key fields. An association of the company’s executives has sought Prime Minister’s intervention in the proposed policy, which it said “lacked transparency and objectivity”.

Company executives said the government had only recently found ONGC competent enough to handle the Gujarat State Petroleum Corporation’s challenging field in the KG Basin but is now citing company’s incompetence to take away producing fields.

Oil ministry officials said that the deal with GSPC was a matter between the two companies and the government played no role in it. Fields considered for private investment are among the better performing and are receiving substantial funds for enhancing production, ONGC executives said, adding that losing them would mean giving up on about 15% of annual output.